Ramaphosa: SA’s greylisting is an ‘opportunity’

President Cyril Ramaphosa.Picture: Oupa Mokoena/African News Agency(ANA)

President Cyril Ramaphosa.Picture: Oupa Mokoena/African News Agency(ANA)

Published Feb 27, 2023


President Cyril Ramaphosa has finally broken his silence on South Africa being placed on the Financial Action Task Force (FATF) “grey list” last week.

The organisation found that the country did not have sufficient mechanisms in place to monitor and combat money laundering and terrorist financing activities.

Ramaphosa, in his weekly From The Desk of The President newsletter, noted that South Africa had been a member of the FATF for the past 20 years.

He said the South Africa’s listing as a “jurisdiction under increased monitoring”, commonly known as greylisting, had caused much concern about the state of our financial institutions, law enforcement agencies and investment environment.

“The situation is concerning but less dire than some people suggest,” Ramaphosa added.

“We have gone through a rigorous process of addressing the issues that FATF has raised with us. The fundamentals are in place and we know what we need to do to get off the greylist. We are determined to do this as quickly as possible. This is important not only for our international standing, but also for our own ability to fight these crimes in our country.”

Ramaphosa said that since the dawn of democracy in 1994, South Africa had sought to build credible, independent institutions and implement effective laws to deal with complex financial crimes of this nature.

The country he noted, had forged collaborative relationships with transnational entities and global bodies in the financial sector, including the FATF and Interpol.

However, during South Africa’s last regular mutual evaluation of its measures to combat money laundering and the financing of terrorism, deficiencies were identified.

“The mutual evaluation was conducted in 2019, when the country was emerging from the state capture era, which had a particularly detrimental impact on institutions like the South African Revenue Service (Sars), National Prosecuting Authority (NPA) and the Hawks.

“Since the results of the mutual evaluation were published in 2021, we have made great progress in addressing the identified shortcomings. Of the 67 recommended actions emanating from the mutual evaluation, we have successfully addressed all but eight strategic deficiencies.

“For example, we have addressed significant weaknesses in our legal framework, through the enactment of amendments to laws on anti-money laundering and combating terrorism financing.

“When it comes to developing world-class expertise, legislative reform and strengthening state institutions to combat complex financial crime, we have come a long way. This is notwithstanding deliberate attempts to erode the state’s ability to detect, investigate and prosecute such crimes during the state capture era.

“We have restored credibility to key institutions like Sars and the NPA to enable them to fulfil their respective mandates. We have bolstered the powers of the Special Investigating Unit (SIU) by establishing a Special Tribunal to recover public funds stolen through corruption and fraud, and an Investigative Directorate in the NPA to investigate serious corruption.”

Ramaphosa said Finance Minister Enoch Godongwana had announced in the Budget last week that additional funds would be allocated to the police, NPA, SIU and Financial Intelligence Centre (FIC) to strengthen the fight against crime and corruption.

He said one of the country’s most effective tools for combating money laundering and other financial crimes was the multidisciplinary Fusion Centre tha was established in 2020.

The Fusion Centre brought together bodies like the NPA, SIU, Sars, the Hawks, Crime Intelligence, State Security Agency and the FIC. Since its inception, the work of the Fusion Centre has led to the preservation and recovery of approximately R1.75 billion in criminal assets.

“It is noteworthy that the strategic deficiencies identified by the FATF do not relate directly to the country’s financial sector. This means that financial stability and costs of doing business with South Africa will not be seriously impacted by the grey listing.”

Ramaphosa said partnerships between the government and the financial sector had played a valuable role in efforts to address serious economic crimes. The South Africa Anti-Money Laundering Integrated Task Force had been set up in 2019 as a partnership between the banking sector and government regulatory authorities. Between the beginning of 2020 and the end of March 2022, successful interventions by the Task Force had led to the preservation of criminal assets worth R86 million.

“Like all countries, we are dealing with the shifting sands of globalised crime and criminal syndicates. The challenge facing authorities is to anticipate criminal innovation and to respond swiftly and effectively.

“As a country, we welcome the intensified monitoring by FATF. We have a focused action plan in place to address the remaining deficiencies identified by the FATF. Most of these deficiencies relate to the implementation of our laws. For example, we need to be able to demonstrate, among other things, an increase in the investigation and prosecution of serious and complex money-laundering and terrorism financing, an increase in mutual legal assistance requests to other countries, an increase in the use of financial intelligence by law enforcement agencies, and the effective implementation of targeted financial sanctions.

“Our action plan to address these deficiencies is aligned with the work we are doing to implement the recommendations of the State Capture Commission as outlined in our submission to Parliament in October last year.”

He added that the greylisting was an opportunity for South Africa to tighten its controls and improve its response to organised crime.

“This will ultimately place us on a stronger footing to effectively fight these damaging and dangerous crimes.”